Food prices: Intensified poverty

SA’S investment rating will be cut to junk status in 2016, says François Conradie, head of research at NKC African Economics. However, this won’t be the biggest danger to the economy this year. The crippling food prices, increased because of one of the worst droughts on record, should be greater cause for concern, he says. The drought has already caused large spikes in food prices. A food basket survey by the Markets & Economic Research Centre shows prices rose by 8.7% between December 2014 and December 2015, exceeding inflation. The same effects were seen in the baskets of low-income households in November 2015, with month-on-month increases averaging 4.47% through to February 2016, according to the Pietermaritzburg Agency for Community Social Action, an NGO that closely tracks and publishes a monthly index of prices of a basic basket of goods.